Havells India Navigates Q2 FY26 with Resilience Amidst Seasonal Headwinds

Havells India Limited, a prominent player in the Indian electrical and consumer durables market, has reported a decent overall performance for the second quarter of fiscal year 2026, ending September 30, 2025. The company's standalone net revenue stood at INR 4,767 crore, marking a 5.2% year-on-year growth. Despite this growth, the quarter presented a mixed bag of results, with certain segments experiencing challenges while others demonstrated robust performance. EBITDA for the quarter grew by 16.3% year-on-year to INR 442 crore, reflecting a margin of 9.3%. Net Profit also saw a healthy increase of 16.5% to INR 317 crore.

Segmental Performance: A Mixed Picture

The quarter's performance was largely influenced by seasonal factors. The summer product categories, including air conditioners, fans, and coolers, faced significant weakness due to a shorter summer season and an overhang of higher channel inventories. This led to a year-on-year decline in revenue for these products and impacted overall growth and margins, particularly within the Lloyd Consumer and Electrical Consumer Durables (ECD) segments. Lloyd Consumer, for instance, saw a substantial 18.5% decline in revenue, contributing to margin compression due to under-absorption and increased consumer offers.

However, other segments provided strong support. The cables business continued its impressive trajectory, exhibiting steady growth momentum, primarily driven by robust demand for power cables. The lighting and fixtures segment also showed positive signs, benefiting from LED pricing stabilization and an initial pickup in residential demand. Within the ECD portfolio, while fans and coolers struggled, the water heater channel and consumer small appliances demonstrated good growth, showcasing the diversified nature of Havells' offerings.

Strategic Initiatives and Future Outlook

Havells is actively addressing the challenges while pursuing strategic growth initiatives. The company expects channel inventories to normalize by the end of Q3 FY26 and working capital levels to stabilize by Q4 FY26. Management has taken proactive steps, including offering direct consumer schemes to clear old inventory, which have since been withdrawn following GST changes. The recent GST rate reduction on air conditioners, televisions, and solar products is anticipated to uplift consumer sentiment and strengthen demand in these categories.

Capital expenditure plans remain robust, with an estimated INR 1,450 crore for FY25-26 and INR 1,000 crore for FY26-27, signaling continued investment in growth. The company's capacity expansion in the cables segment is on track, supported by the acquisition of a 39-acre land parcel in Alwar, Rajasthan. Furthermore, Havells' significant investment in Goldi Solar during Q1 FY26 is expected to yield substantial benefits from strategic supplies and drive considerable growth in the solar business, particularly in the second half of the current fiscal year.

Driving Efficiency and Innovation

Havells is also focusing on enhancing productivity and rationalizing costs across its operations. The company's prior investments in sales infrastructure, functional infrastructure, R&D, and digitization are now translating into tangible advantages. Management highlighted a continuous evaluation of new product categories, with recent additions like chimneys and hobs in ECD, and exploration of emerging areas such as EV chargers and automation. This strategic foresight aims to fill market white spaces and maintain a competitive edge.

Overall, Havells India Limited's Q2 FY26 performance reflects a company adept at navigating market complexities. While seasonal headwinds impacted certain segments, the underlying strengths in cables, strategic investments in solar, and a proactive approach to product innovation and operational efficiency position Havells for sustained growth and improved profitability in the coming quarters. The company remains optimistic about a positive second half, driven by festive demand and favorable market conditions.